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Ep 122: Intuition, Inflation, and the Future of Cities with Dusten Hendrickson


Our discussion today with Dusten Hendrickson covers a vast array of interesting topics. We begin by gaining some insights into Dusten’s career trajectory, from owning a roofing company to multifamily syndications and developments. Dusten has gone through hard times in business. However, through learning to say no, pivoting when he needed to, working with people whose skill sets complement his own, and trusting his intuition, Dusten has reached a point where he walks away from deals easily because he knows there will be better ones around the corner. Our discussion then branches out to the real estate industry as a whole, and how the cost of housing and rental is being impacted as a result of the COVID-19 pandemic. This is affecting the entire economy because as the number of people who are paying for accommodation increases, the amount they spend on all other items decreases. We also talk about inflation, the stock market, the issue with the labor pool, why holding onto properties is never a bad thing, why the government can’t get affordable housing right, and elements that can make or break a deal. Finally, we all share our thoughts about what the future of cities could look like. There’s something in this conversation for everyone, so be sure not to miss it!

Key Points From This Episode:

  • Dusten explains his transition from roofing to multifamily investing.

  • House-building is hard and time-consuming, but working in the industry taught Dusten a lot.

  • Dusten’s realization that single-family homes are hard to scale and inefficient.

  • Why Dusten thinks being in development is a good place to be right now.

  • The point where Dusten realized he was burning out and needed to pivot.

  • Dusten’s warning to everyone in the real estate industry to learn how to say no.

  • The importance of working with people whose skill sets complement your own.

  • Knowing what is going on in the development world gives Dusten an advantage in the syndication world.

  • Dusten explains the inflationary trends he is seeing currently; land, infrastructure, labor.

  • There is a lack of a talent pool of young people looking for work as maintenance staff.

  • Dusten has reached the point where he will walk away from deals that don’t seem good enough because he knows there will be better ones.

  • Location and the operator are vital elements that can make or break a deal.

  • Listen to your intuition; “your gut is almost never wrong.”

  • Examples of developments that are worth investing in, and not worth investing in.

  • Why Dusten looks at different inflation metrics to those that the government looks at.

  • Why people are going to have to spend more on rent, and the impact this is going to have on other forms of spending.

  • Reasons the government can’t get affordable housing right.

  • Dusten’s philosophy if he can’t sell something: Who cares? It’s a great asset and its value is likely to only keep growing.

  • For any liquid assets, you should be getting close to a 10% return.

  • The new trend of investors wanting to quickly buy and sell and why this isn’t necessarily a good strategy.

  • Dusten, Chris, and John speculate about the future of cities like New York, and the kinds of buildings and businesses that will inhabit them.

Tweetables:

“I’m pickier at what I develop and I do think that developing right now because in-place multifamily sales are so competitive, I believe that development is a very good option right now.” — Dusten Hendrickson [0:05:26]

“No deal is that big of a deal.” — Dusten Hendrickson [0:20:24]

“If you’re walking a complex and for some reason you just don’t want to be there, that’s what your renters are going to feel and they’re going to leave.” — Dusten Hendrickson [0:23:40]

“There is a lot of discretionary spending that American’s could cut. We are super spoilt as a people. We don’t need all the shit that we have and that stuff will get cut out of the budget because you’re going to have to pay rent. You can’t cancel rent.” — Dusten Hendrickson [0:36:28]

“If we can’t sell it, who cares? I’ve got a great asset. Let’s just refinance it. If the asset doesn’t sell, you should always be prepared to own that asset forever.” — Dusten Hendrickson [0:37:58]

Links Mentioned in Today’s Episode:

Dusten Hendrickson on LinkedIn

Dusten Hendrickson Email Address

Mailbox Money

Jake and Gino Conference

The Park at San Marco


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